ENTREPRENEURSHIP

May 3

What's the Secret of Silicon Valley? Hint: It's Not Just Startups What's the Secret of Silicon Valley? Hint: It's Not Just Startups What's the Secret of Silicon Valley? Hint: It's Not Just Startups

Reid Hoffman

Lessons from the "Masters of Scale" Podcast

The first episode of the “Masters of Scale” podcast -- “Hand Crafted” featuring Airbnb Co-Founder and CEO Brian Chesky — launches today, and the remaining episodes will be released weekly. I'm proud of this podcast; I think you’ll find that it doesn’t sound like any business podcast you’ve ever heard. You can subscribe via Apple Podcasts, Stitcher and Google Play.

My friend June Cohen and I decided to make “Masters of Scale” because there aren’t many people who know how to scale up effectively, and there are very few places where you can learn how to build great companies of great scale.

If you ask the average person to explain Silicon Valley's success, the answer you’re likely to hear is: “startups.” But in my view, the real answer is “scaleups” — that is, companies with world-changing impact that have revenue in the billions and users in the tens of millions. Explaining the success of Silicon Valley by saying that the region is good at starting companies is deceptively incomplete in two important ways.

First, only a tiny fraction of the world’s startups originate in Silicon Valley, and this fraction has been getting smaller as startup knowledge spreads around the globe. Thanks to the internet, entrepreneurs everywhere have access to techniques like “The Lean Startup,” rather than relying purely on trial-and-error or informal peer advice. And as other markets have matured, rather than immigrating to Silicon Valley to start companies, smart founders are electing to start companies in their home countries all across Africa, Asia, Australia, Europe, and South America.

Second, simply starting a company is necessary but insufficient. To be a home to transformative companies with world-changing impact, a region has to allow startups to grow up into “scaleups.” Consider that there are total of 13 publicly-traded technology companies in the world that have a market capitalization of more than $100 billion. Of these, six are in Silicon Valley (Apple, Alphabet, Facebook, Intel, Oracle, and Cisco). These companies have transformed our daily lives, from communications to media to how we connect with each other. Silicon Valley certainly doesn't account for 46% of the world's startups, yet that same proportion of the most important technology companies come from and are a part of Silicon Valley.

The Masters of Scale podcast builds on the theories shared in the 2015 Stanford class I taught with John Lilly from Greylock Partners, LinkedIn co-founder Allen Blue, and my co-author Chris Yeh about extremely rapid scaling — a practice for which we coined the term, “blitzscaling.” (You can view the classes online at the Greylock Partners YouTube channel, or listen to them as a Greylock podcast.)

The extreme growth of blitzscaling, which, when combined with an innovative business model, can generate massive value and long-term competitive advantage. Often, the source of this competitive advantage comes from the network effects built into the business model, where the first company to achieve critical scale triggers a feedback loop that allows it dominate a winner-take-most or winner-take-all market.

The kind of growth involved in blitzscaling (tripling in headcount each year isn’t uncommon) requires a radically different approach to management than that of a typical growth company (which would be happy to grow 15% per year). Companies that blitzscale have to rapidly navigate a set of key transitions as their organizations grow, and have to embrace counterintuitive rules like launching flawed and broken products or ignoring angry customers.

Masters of Scale is a guide on how to build and scale incredible organizations, based on the experiences of the masters of scale who have actually done it, all served up with a mix of music, humor, and storytelling.

Each of the 10 episodes focuses on a specific scaling theme, and features the wisdom of a particular master like Facebook's Sheryl Sandberg or Reed Hastings from Netflix along with my additional thoughts and reflections, and cameo appearances by other experts ranging from Nobel Prize-winner Daniel Kahneman to a local wine shop owner. You'll join me on an intellectual journey as my guests and I explore the hard-won lessons we've learned over the past two decades of scaling amazing companies.

In addition to the 10 thematic episodes, we'll also be releasing full one-on-one interviews with all the masters of scale. We were lucky enough to have dozens of people share their insights about scaling. In addition to my partners at Greylock including Josh Elman, John Lilly, and Jerry Chen, some of the people featured in the podcast include:

  • Andrew Ng, Google & Baidu
  • Aneel Bhusri, Workday
  • Bill Gates, Microsoft
  • Brian Chesky, Airbnb
  • Eric Schmidt, Google/Alphabet
  • Jeff Weiner, LinkedIn
  • Jerry Yang, Yahoo!
  • Juliana Rotich, Ushahidi
  • Julie Hanna, Kiva
  • Kara Goldin, Hint Water
  • Kathryn Minshew, The Muse
  • Linda Rottenberg, Endeavor
  • Marc Pincus, Zynga
  • Margaret Heffernan, Author
  • Mariam Naficy, Minted & Eve.com
  • Mark Zuckerberg, Facebook
  • Nancy Lublin, Crisis Text Line
  • Patrick Collison, Stripe
  • Reed Hastings, Netflix
  • Sara Blakely, Spanx
  • Selina Tobaccowalla, Gixo & Evite
  • Sheryl Sandberg, Facebook
  • Tristan Walker, Walker & Company

Masters of Scale will provide useful knowledge and concrete suggestions to people throughout the scaling journey. Whether you're a leader or manager who is trying to rapidly scale a business or business unit, or whether you simply want to better understand the dynamics behind companies like Google, Facebook, and Amazon, which now impact every aspect of our daily lives, this podcast will give you a peek behind the curtain at the real thoughts and experiences of the masters of scale who are shaping today's world.

I've learned a lot in the course of creating these stories. For example, I've known my friend, Netflix co-founder and CEO Reed Hastings, for many years—and not just because of our eerily similar names. Yet when we sat down for this podcast, I learned that one of his key management practices is to hold offsite “Start / Stop / Continue” dinners with his team. These are special opportunities for his key people to give each other honest and concrete feedback in an informal setting. As their name indicates, these dinners focus on giving each other truthful feedback about actions and activities you'd like others to start doing, stop doing, or continue doing. It's a fantastic idea, and is far superior to the typical practice of evaluating people's performance as part of an traditional, ratings-based annual review. That's just one of the many powerful techniques that I learned (and you will learn) as part of Masters of Scale.

I am thrilled to be working with June, her co-founder Deron Triff, and the rest of the WaitWhat team on producing Masters of Scale. June and Deron are probably the world's leading experts on spreading ideas. June was the driving force behind turning TED Talks from a set of speeches given at a single conference into one of the world's premier media properties. Her Co-Founder Deron led TED’s international expansion and media extensions, launching TED Radio Hour and building views/listens to 1 billion/year. They recently started WaitWhat to produce content that sparks your curiosity and changes your understanding of the world. So when June proposed that we collaborate on a podcast series about the secrets of scaling, I jumped at the opportunity.

Masters of Scale is the first of several projects I'm working on to spread these ideas. In addition to the podcast and the Stanford class, Chris Yeh and I are also working on a new book, “Blitzscaling,” which will be published in the Fall of 2018. If you're interested in learning about blitzscaling and scaleups, visit blitzscaling.com to sign up for the Blitzscaling newsletter and pre-order the upcoming book.